Marketing / Organizational Strategy / Product Development / Technology

Adobe Attempting to Expand its Marketing Cloud by Acquiring TubeMogul

brett_wilson_rings_nasdaq_opening_bell_7-18-2014

TubeMogul ringing open bell on July 18, 2014, the first day the company became publicly traded on Nasdaq. Photo Credit: User PastryGirl37 on Wikipedia Commons

Adobe is a major player in the digital marketing industry, and the $50 billion software giant is now attempting to expand its presence even further. On November 10, 2016 Adobe announced it had agreed to acquire video media-buying service TubeMogul for $540 billion. The agreement states that Adobe will purchase TubeMogul shares for $14 in cash, which is an 83% shareholder premium over the company’s $7.67 share price, according to Jack Marshall of the Wall Street Journal. The stock had a history of volatility, beginning at $7 per share in its IPO, at one point rising above $23 per share, and eventually falling back down to the share price that was purchased by Adobe.

This acquisition is a major move in regards to the Adobe Marketing Cloud, a software platform that manages company marketing data and analytics. TubeMogul bids on video advertising space on a large range of platforms including desktop, mobile, other streaming devices, and television. In its press release addressing the acquisition, Adobe claimed video advertising to be the fastest growing advertising category. If that claim is true, it could make all the difference for Adobe in what seems like a race to the top of the marketing cloud industry.

Another exciting factor that TubeMogul brings to Adobe’s table is the tech startup’s automated media buying. Through automated software, TubeMogul bids on video advertising space for its clients, allowing brands and agencies increased access to video advertising. This specific type of media buying is very new and is nowhere near the most common method of ad-buying, but it has a lot of potential and may very well be the dominant way of doing business sometime in the future. If that does happen, Adobe will likely start off more established than almost all of its competitors.

A tech company as large as Adobe will acquire startups on a relatively frequent basis, but this one seems to have added significance because of the hole it fills. Adobe includes enough products to satisfy almost all marketing operations. Between its creative suite (Photoshop, Illustrator, etc.), Flash, and its marketing cloud services for the quantitative side of marketing, it was conceivable that companies and agencies could both create advertising content and track that content’s performance, only having to look elsewhere to actually gain access to media spots. The addition of TubeMogul should complete the marketing capabilities of Adobe, allowing clients to turn to the company for all steps of their digital advertising needs.

Other marketing technology giants, such as Salesforce and Oracle seem to be racing against Adobe for market share in marketing suite services. Considering Adobe’s acquisition, video ad buying seems like quite the lucrative business to be in. I’d personally expect similarly hefty paydays going forward for those in the same business as TubeMogul.

 

 

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